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  • Mar 05, 2026
  • By WTVAPGO
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Scandinavian Tobacco Group Reports 2025 Results: Tariffs and Weak Demand Weigh on Revenue of About $1.4 Billion


March 5, 2026

Scandinavian Tobacco Group (STG) reported its financial results for 2025, with revenue of DKK 9.036 billion (approximately $1.407 billion). EBITDA before special items reached DKK 1.791 billion (about $278 million), while free cash flow before acquisitions totaled DKK 595 million (about $92.7 million). Several key indicators declined year-over-year, and the company did not meet its revenue and free cash flow guidance revised in Q3.

Key Points

  • 2025 revenue reached DKK 9.036 billion (about $1.407 billion), with organic growth of -1.8%.
  • EBITDA (before special items) was DKK 1.791 billion ($278 million), down 13.9% year-over-year, with a margin of 19.8%.
  • The company did not meet its updated Q3 revenue and free cash flow guidance.
  • STG cited factors including tariffs, a new European ERP (SAP) rollout affecting inventory availability and receivables, and intense retail price competition.
  • 2026 guidance includes net sales growth of ±2% at constant currencies and free cash flow before acquisitions of DKK 950 million–DKK 1.2 billion ($148M–$187M).

2Firsts, March 5, 2026

According to halfwheel, Scandinavian Tobacco Group (STG) reported weaker performance in 2025 compared with 2024. The company lowered its full-year guidance twice during the year—first after tariffs were introduced in April 2025 by U.S. President Donald Trump, and again in November during its third-quarter (Q3) results announcement. Ultimately, weaker-than-expected performance in the fourth quarter (Q4) caused the company to miss some of its revised targets.

Key financial results for 2025 reported by STG include:

  • Revenue of DKK 9.036 billion ($1.407 billion), with organic growth of -1.8%.
  • EBITDA before special items of DKK 1.791 billion ($278 million), down 13.9% year-over-year.
  • EBITDA margin of 19.8%, compared with 22.6% in 2024.
  • Free cash flow before acquisitions of DKK 595 million ($92.7 million), down 36.1% year-over-year.
  • Adjusted earnings per share (EPS) of DKK 10.8 ($1.68), down 21.17%.
  • Return on invested capital (ROIC) of 7.9%, compared with 9.4% in 2024.

The company said that while it did not reach its updated Q3 guidance for revenue and free cash flow before acquisitions, EPS and ROIC still fell within the ranges previously provided.

STG attributed the results to several factors, including the Trump tariffs, increased receivables linked to the rollout of a new SAP-based ERP system in Europe, intense price competition in the retail cigar business, and weakening consumer confidence in the United States.

In a company statement, CEO Niels Frederiksen and Chairman Henrik Brandt said the global handmade cigar market in 2025 continued to be driven largely by U.S. consumption. The company estimated that U.S. consumption declined by a “mid-single-digit percentage.” However, STG said it managed to keep net sales stable in the category through expanded retail and online distribution coverage as well as strategic price increases for branded products.

For machine-made cigars, the company estimated that the overall European market declined by about 1%–2%. STG also noted that the implementation of its global SAP system affected inventory availability during 2025, contributing to some loss of market share.

The report noted that STG has long stated its expectation that the U.S. handmade cigar market would gradually decline by about 1% annually, a trend that was temporarily interrupted during the COVID-19 pandemic due to increased sales.

The company also highlighted that it returned nearly DKK 6 billion ($935 million) to shareholders during its five-year strategy plan “Rolling Towards 2025.” STG plans to continue pursuing similar goals under its new five-year strategy, “Focus2030.”

Under the Focus2030 plan, STG aims to increase return on invested capital from about 8% in 2025 to more than 11% by 2030. The company intends to achieve this through operating profit growth, generating more than DKK 1.2 billion ($187 million) in free cash flow, and maintaining a disciplined capital allocation strategy. It also plans to continue evaluating acquisitions or potential divestments of non-core assets where they support strategic and financial objectives.

In terms of business structure, the report noted that machine-made cigars and tobacco products account for about 50% of STG’s net sales, while handmade cigars represent about 35%.

Within the company’s North American online and retail business, 88% of retail sales come from online and catalog channels, while 12% come from physical stores. Retail sales declined by 7.5%, which the company said appears to be partly related to the loss of a distribution agreement for Zyn in mid-2024. However, the company added that its physical retail operations are still growing.

STG currently operates 15 retail stores and plans to expand that number to 25 stores by 2030.

For 2026 guidance, STG adopted a new reporting format using Net Sales Growth at Constant Currencies. The company forecasts:

  • Net sales growth at constant currencies of ±2%.
  • EBITDA margin (before special items) of 13%–14.5%.
  • Free cash flow before acquisitions of DKK 950 million–DKK 1.2 billion ($148M–$187M).
  • Earnings per share of DKK 9–11 ($1.40–$1.71).

Image source: halfwheel